By Ansumana Darboe
Per diem payments are widely recognised as a necessary tool for facilitating official travel. They cover daily expenses such as travel, meals, lodging, and other incidentals while on duty. However, beneath this seemingly straightforward system lies a complex economic issue — the widening gap between national budgets allocated in Gambian Dalasi (GMD) and per diem payments made in foreign currencies. This financial structure, though rooted in policy, presents significant challenges for economic management and national development.
National budgets are typically developed in the local currency (GMD), but the reality of travel often requires per diem payments to be made in U.S. Dollars, Euros, Pound Sterling or CFA Francs. This creates a disconnect between budget planning and execution. The Dalasi’s persistent depreciation only exacerbates the problem, making it increasingly expensive to fulfill obligations denominated in stronger foreign currencies.
The increasing need for foreign currency to meet per diem obligations puts additional strain on the country’s limited foreign exchange reserves. This drives up demand for hard currency, which in turn contributes to a worsening balance of payments deficit. As the Dalasi is converted to foreign currency, the Central Bank faces greater pressure to maintain currency stability, which can contribute to inflationary trends. This inflation impacts the cost of living for ordinary Gambians, reducing the real value of wages and savings.
A significant concern with the current system is how it distorts public spending priorities. Rather than being directed toward critical investments in infrastructure, education, health, or other essential sectors, a substantial portion of available funds is instead spent on travel and per diem. This raises alarms for economic efficiency and resource allocation. When funds are disproportionately directed toward administrative expenses, overall economic progress and development are slowed.
Furthermore, this practice can foster a dependency culture, particularly within the public sector. The system incentivises attending workshops, conferences, and other events that offer per diem payments, rather than focusing on outcomes and tangible service delivery. This reliance on per diem for motivation detracts from the overall efficiency and effectiveness of governance and service provision.
Another unintended consequence is the widening economic inequality between urban and rural areas. Those in urban centres, particularly in government or higher-level roles, are more likely to benefit from foreign currency per diem payments, while rural-based workers often receive fewer or no allowances. This disparity perpetuates the development divide between urban and rural regions of the country.
Addressing these issues requires careful policy reform. A greater emphasis on virtual meetings and training programmes could significantly reduce travel-related costs. Implementing fixed per diem rates in GMD for domestic travel and adjusting foreign per diem ceilings based on current exchange rates would better align per diem expenses with real economic conditions. Additionally, strengthening foreign exchange reserves through initiatives like tourism, export diversification, and leveraging remittances could ease the pressure on foreign currency demand. Travel should be carefully scrutinised to ensure it aligns with national development priorities, and only essential trips should be approved. Open dialogue with stakeholders is needed to ensure resources are used effectively and equitably.
While per diem payments serve an important function, their reliance on foreign currencies is contributing to economic instability. By reforming the way per diem is managed, The Gambia can optimise resource use, improve fiscal efficiency, and more effectively pursue its development goals. The time has come to reconsider per diem policy not merely as an administrative convenience but as a critical component of the nation’s broader economic strategy.
